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Royal Commission Final Report: Here’s what the experts think

(Photo: Getty)
(Photo: Getty)

Two days after the long-awaited final report into the Banking Royal Commission, industry experts have had plenty of time to mull over the 1,133 word report.

And while the industry has generally embraced most, if not all, of the report’s 76 recommendations, others have found it lacking.

Some are disappointed by the lack of real, structural change, while others are adamant that some recommendations go too far.

Meanwhile, others still are just fighting for their voices to be heard.

These five experts point out where they think the report recommendations fall down:

UBS: “Soft” report recommendations won’t be long-term game changers

In a note on the report, UBS analysts called the final report “disappointing”, with the recommendations unlikely to stick for long.


“There was much discussion around misconduct within the banks and the need to change culture; however, the final recommendations fell well short of market expectations.

“It is possible that the banks may face criminal proceedings, but we do not believe that any of the 76 recommendations by themselves will have a material financial impact on the banks,” the analysts wrote.

“The large amount of misconduct publicly exposed by the RC will likely ensure the banks change their behaviour near term.

Given that most of the cultural change will have to be self-enforced, the UBS analysts argued that enduring, lasting cultural change would be difficult, especially as figureheads in management and company boards rotate.

“The soft recommendations of the Royal Commission final report is a clear win for the banks.”

USYD: “Sad truth” is that customers will keep getting hurt

The incentives and remuneration offered to bank staff to hit targets and make profits at the expense of the customer’s best interest have been at the heart of misconduct and, subsequently, a central focus of the inquiry.

And if performance continues to be measured the same way, nothing much will ultimately change, argues Kim Sheehan, a specialist in executive remuneration at the University of Sydney Law School.

“The sad truth is that left to their own devices, our financial institutions are likely to continue to set targets that value financial results over the right results for customers,” she wrote in a piece for the University of Sydney.

“If financial institutions don’t expressly consider how good (profit) performance is achieved – whether it is by treating customers poorly, being less than frank with the regulator, cutting corners to achieve sales – nothing much will change and customers will continue to feel bitter and hurt, and the community will remain distrustful.

“Acting in the customers’ interests needn’t be at the expense of profit, but it might well be at the expense of as much profit.”

Moula: Consumers will benefit from better deals thanks to greater competition

Small business lender Moula founder and CEO Aris Allegos said he hoped that the Royal Commission’s recommendations would see more transparency and make it easier for small businesses to access financing.

“A banking system that is characterised by transparency and ease of use will enable heightened competition with new financiers, fintech and regtech offerings entering the market to better serve consumers,” he said.

“As a result of the heightened spotlight on the industry, we’ll start to see better rates, deal terms, and product experiences, which is great news for business owners and consumers.”

First Nations Foundation: Little has changed for indigenous Australians

The final report has been a disappointment for indigenous Australians, who have had “more than a token mention”, said a statement from the national Indigenous financial foundation First Nations Foundation.

“The recommendations of the Banking Royal Commission will do precious little to increase financial outcomes for First Nations people,” First Nations Foundation CEO Amanda Young said.

“The Commission provided an embarrassingly limited report, doing less than the bare minimum to protect and educate First Nations people.”

Nearly half of indigenous Australians were either severely or fully excluded from Australia’s financial system, Young pointed out.

“A phone line at a bank is hardly going to fix this problematic statistic.”

The financial sector needed to work closely with the Foundation to provide indigenous Australians with the skills they needed to be fully included in the country’s financial system, Young said.

“It’s time to service the underbanked and it’s time to invest in financial education for First Nations people.

“It is the responsibility of the banks to make this happen and we can ignite the change to help them improve financial wellbeing for nearly 700,000 people.”

FBAA: Housing affordability will become more difficult

The recommendation to eliminate trail commissions will mean interest rate hikes, thereby pushing up prices for consumers, warned Finance Brokers Association of Australia (FBAA) managing director Peter White.

“This could force upfront commissions to rise in order to compensate for reduced revenues to brokerages, which in turn will lift interest rates and make housing affordability more difficult,” he said.

“If a user-pays model was implemented, we know that most borrowers wouldn’t pay, and banks would make more money and standards would drop further.”

Mortgage broker small businesses would be wiped out “for the monetary gain of the big banks”, White added.

“Customers have no issues with broker commissions,” he argued, pointing out that more than 59 per cent of loans were written through brokers.

“Customers get a better outcome by using a mortgage broker. They get better service, more choice and a well trained finance expert to take them through what is a massive and stressful time of their life.”

Here’s Yahoo Finance’s breakdown on what the end of commissions will mean for mortgage applicants.

What do you think the Royal Commission’s recommendations will mean for Australians? Send your ideas to

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